HSBC Bank Canada has announced that it intends to issue $400 million in principal amount of subordinated debentures through an agency syndicate led by HSBC Securities (Canada) Inc.

The debentures will bear interest at a fixed rate of 4.80% per annum payable semi-annually until April 10, 2017, and thereafter at a rate per annum equal to the 90-day bankers’ acceptance rate plus 1% payable quarterly until maturity on April 10, 2022.

The issue was priced at $99.89 with a yield to April 10, 2017 of 4.81%. Subject to regulatory approval, the bank may, at its option, redeem the debentures at par in whole on or after April 10, 2017.

The transaction is subject to regulatory approval and is expected to close on April 9. Proceeds from the offering will be used for general corporate purposes and to enhance the bank’s tier 2 capital base.

The debentures have been provisionally rated “AA-” by Standard & Poor’s Ratings Services and “AA (low)” by DBRS.

The offering of the debentures will be made pursuant to the short-form base shelf prospectus dated March 27, 2007 and a pospectus supplement relating to the debentures, which will be filed by the bank with the securities regulatory authorities in all provinces and territories of Canada.